Retailing

More in store

TO PARAPHRASE Napoleon, Britain is becoming a nation of shop assistants. Retailing already provides 9% of jobs in Britain, one of the highest figures in Europe. Even so, many retailers have recently announced plans to hire thousands more workers: 9,000 at Safeway (including 1,000 in a joint venture in Ulster, announced on June 19th), 5,000 at Boots, 3,400 at Debenhams and 1,700 at Marks and Spencer. This is not just in response to the recent sharp rise in retail sales. Some stores are taking on more staff because their customers are demanding better service. Some large retailers are expanding by taking business from smaller, less competitive rivals. And a new study this week suggests that, unlikely as it may seem, many parts of Britain still do not have enough supermarkets.

The study, by GMAP, a consultancy, compared the amount of floorspace devoted to selling groceries with the number of households in each county. It found wide variations: some counties had two and a half times as much grocery-selling space per household as others. Among the least saturated were inner London, Cambridgeshire and South Yorkshire; while Hertfordshire, Cheshire and Tayside had the most provision. GMAP also found that, apart from Tesco's strong showing in southern England, the geographical coverage of the big four supermarketers (Tesco, Sainsbury, Safeway and Asda) is remarkably patchy—contrary to the popular view that they have the entire country sewn up.

But although there would seem to be plenty of potential for growth, the problem is finding somewhere to put new stores, especially now that strict planning controls have been placed on out-of-town shopping developments. On June 17th Carpetright, a chain of 267 carpet stores, said that a lack of sites was hampering its expansion plans. Nevertheless, its market share has grown from 13% to 17% in the past year, and it still hopes to open 40 stores this year.

New technology is enabling retailers to increase their sales without opening new branches. Computer-driven improvements in stock control mean that stockrooms can be turned into selling space, allowing stores to sell a wider variety of goods. Clive Vaughan, an analyst at Verdict, another retail consultancy, says that this is good news only for some: supermarkets, for example, are using their extra floor space to muscle into new markets such as books, CDs and videos, putting pressure on stores, such as W.H. Smith, which already sell these. In January, Smith's said it would close Playhouse, its 29-strong chain of video outlets. The opening of 41 new Argos stores this year may hit other retailers: by asking shoppers to choose goods from a catalogue, Argos branches can offer a wider range than other stores of the same size.

And, with rather less fanfare than those retailers announcing big expansion plans, a number of others have unveiled cutbacks. Electrical stores, for instance, are in the midst of a shake-out. Granada is closing 100 of its 562 television-rental stores as more consumers buy rather than rent televisions and videos; and Comet is closing 54 stores after its purchase last year of the retailing arm of Norweb, an electricity distributor. Medium-sized supermarket chains are also being squeezed, with Kwik Save currently half-way through a programme of shutting 107 of its 1,000 stores and Somerfield planning to close up to 40 of its 424 outlets.

Perhaps the most dramatic fate awaits Littlewoods, a 135-strong chain of department stores. In January, its owners, the Moores family, abruptly dropped a £135m ($220m) expansion scheme, which would have created 3,000 jobs, and put the entire business up for sale. Retail analysts predict that a consortium of rival retailers will descend on Littlewoods like a pack of hyenas, carving up its sites between them in their desperation to find new outlets.